In this article, we discuss the 5 best commodity stocks to invest in. If you want to read about some more commodity stocks, go directly to 11 Best Commodity Stocks To Invest In.
5. LyondellBasell Industries N.V. (NYSE:LYB)
Number of Hedge Fund Holders: 37
LyondellBasell Industries N.V. (NYSE:LYB) operates as a chemical company in the United States, Germany, Mexico, Italy, Poland, France, Japan, China, the Netherlands, and internationally. It is one of the elite commodity stocks to invest in. The firm posted earnings for the second quarter of 2022 on July 29, reporting earnings per share of $5.19, beating market estimates by $0.49. The revenue over the period was $14.8 billion, up more than 28% compared to the revenue in the same period last year.
On September 19, UBS analyst Joshua Spector maintained a Neutral rating on LyondellBasell Industries N.V. (NYSE:LYB) stock and lowered the price target to $83 from $96, noting there was investor caution in the chemicals space after the recent profit warnings.
Among the hedge funds being tracked by Insider Monkey, California-based investment firm Eagle Capital Management is a leading shareholder in LyondellBasell Industries N.V. (NYSE:LYB), with 4 million shares worth more than $358 million.
In its Q3 2021 investor letter, Miller Howard Investments, an asset management firm, highlighted a few stocks and LyondellBasell Industries N.V. (NYSE:LYB) was one of them. Here is what the fund said:
“We initiated a position in LyondellBasell Industries N.V. (NYSE:LYB). Chemical markets are currently robust given the combination of 2020 plant shutdowns and strongly recovering demand. Despite the tailwinds, Lyondell trades at a low valuation and yields just under 5%.”
4. Alcoa Corporation (NYSE:AA)
Number of Hedge Fund Holders: 39
Alcoa Corporation (NYSE:AA) produces and sells bauxite, alumina, and aluminium products. It is one of the top commodity stocks to invest in. On August 30, the company announced that it would be cutting one third of the production capacity at the Lista smelter in Norway because of high energy costs for the site. The Lista smelter has three potlines with an annual nameplate capacity of 94,000 metric tons/year. The Lista site is currently exposed to spot energy pricing, which has increased to more than $600/MWh.
On September 21, Credit Suisse analyst Curt Woodworth maintained a Neutral rating on Alcoa Corporation (NYSE:AA) stock and lowered the price target to $50 from $63, noting that lower commodity prices and operational and energy cost pressures were weighing on the stock.
At the end of the second quarter of 2022, 39 hedge funds in the database of Insider Monkey held stakes worth $1.2 billion in Alcoa Corporation (NYSE:AA), compared to 50 in the preceding quarter worth $2.8 billion.
3. Barrick Gold Corporation (NYSE:GOLD)
Number of Hedge Fund Holders: 40
Barrick Gold Corporation (NYSE:GOLD) engages in the exploration, mine development, production, and sale of gold and copper properties. The firm is among the best commodity stocks to invest in. On September 2, the company announced that it would be selling a portfolio of royalties to Maverix Metals for up to $60 million. The portfolio consists of 22 royalties on the production of minerals from mines in North America, South America, Australia, and Africa. The transaction is expected to close at the end of the third quarter.
On July 19, Barclays analyst Matthew Murphy maintained an Overweight rating on Barrick Gold Corporation (NYSE:GOLD) stock and lowered the price target to $25 from $28, noting that copper stocks faced headwinds on macro and fundamental levels.
Among the hedge funds being tracked by Insider Monkey, New York-based firm First Eagle Investment Management is a leading shareholder in Barrick Gold Corporation (NYSE:GOLD), with 26.6 million shares worth more than $471 million.
In its Q1 2022 investor letter, ClearBridge Investments, an asset management firm, highlighted a few stocks and Barrick Gold Corporation (NYSE:GOLD) was one of them. Here is what the fund said:
“Also within the structural bucket, we have selectively added to our commodity exposure with the purchase of Barrick Gold (NYSE:GOLD). Canadian mining company Barrick Gold is a play on operating improvements. The company has aggressively delivered its balance sheet and reduced capex spending to a lower level more permanently, directing its healthy free cash flow to dividends and buybacks.”
2. Newmont Corporation (NYSE:NEM)
Number of Hedge Fund Holders: 56
Newmont Corporation (NYSE:NEW) is one of the most prominent commodity stocks to invest in. The firm posted earnings for the second quarter of 2022 on July 25, reporting earnings per share of $0.46, missing market estimates by $0.15. The revenue over the period was $3 billion, flat when compared to the revenue over the same period last year but beating analyst expectations by $20 million. The firm said it expected gold production of 6 million ounces in the 2022 fiscal year.
On September 16, Barclays analyst Matthew Murphy maintained an Equal Weight rating on Newmont Corporation (NYSE:NEW) stock and lowered the price target to $57 from $58, noting the firm had delayed the construction decision timeline for the Yanacocha Sulfides project.
Among the hedge funds being tracked by Insider Monkey, Florida-based investment firm GQG Partners is a leading shareholder in Newmont Corporation (NYSE:NEW), with 34.8 million shares worth more than $2 billion.
In its Q2 2022 investor letter, First Eagle Investments, an asset management firm, highlighted a few stocks and Newmont Corporation (NYSE:NEW) was one of them. Here is what the fund said:
“Shares of Colorado-based Newmont Corporation (NYSE:NEW), the largest gold miner in the world, experienced weakness in the quarter as falling gold bullion prices and cost inflation hurt miners in general. More idiosyncratically, the company reported slightly disappointing earnings and production results for its most recent quarter due to pandemic-related disruptions, ongoing supply-chain constraints, and labor shortages.
It also warned that operating costs for 2022 were likely to come in at the upper end of previous guidance. We remain constructive on the stock, which offers steady production anchored in good jurisdictions, a good pipeline of organic projects, a strong balance sheet, and proven management.”
1. Freeport-McMoRan Inc. (NYSE:FCX)
Number of Hedge Fund Holders: 56
Freeport-McMoRan Inc. (NYSE:FCX) engages in the mining of mineral properties in North America, South America, and Indonesia. The company is slowly building a dividend profile. On September 21, Freeport-McMoRan Inc. (NYSE:FCX) declared a quarterly dividend of $0.15 per share, in line with previous. The forward yield was 2.02%. The dividend is payable to shareholders by mid-October. The firm is based in Arizona and was founded in 1987.
On July 22, RBC Capital analyst Sam Crittenden maintained a Sector Perform rating on Freeport-McMoRan Inc. (NYSE:FCX) stock and lowered the price target to $35 from $46, noting that the firm had reported another strong quarter.
At the end of the second quarter of 2022, 56 hedge funds in the database of Insider Monkey held stakes worth $2.4 billion in Freeport-McMoRan Inc. (NYSE:FCX), compared to 68 the preceding quarter worth $4.1 billion.
In its Q1 2022 investor letter, ClearBridge Investments, an asset management firm, highlighted a few stocks and Freeport-McMoRan Inc. (NYSE:FCX) was one of them. Here is what the fund said:
“Supply chains eased for some goods, but remained challenged for many commodities including energy, agriculture, and fertilizer due to war and general scarcity, and also in many consumer products as semiconductors remained in short supply. Copper and gold producer Freeport- McMoRan (NYSE:FCX) rose as copper prices remained strong due to supply shortages and growing use in renewable energy systems and electric vehicles.”
You can also take a peek at 10 Russell 2000 Basic Materials Dividend Stocks to Buy and 10 Utilities Stocks with Over 3% Dividend Yield.
